Shares of up-and-coming "neocloud" Nebius Group (NBIS 4.45%) rocketed 61.7% in May, according to data from S&P Global Market Intelligence.

Nebius was formerly known as Yandex, the "Russian Google." However, following Russia's invasion of Ukraine and the dawn of the artificial intelligence (AI) revolution, the company divested its Russian assets and changed its name to Nebius Group in August 2024, with the goal of becoming an AI neocloud based in Europe.

In May, Nebius reported its first-quarter 2025 results, showing strong hypergrowth, albeit off a very low base, due to its change in business model. Nebius also invested in a Jeff Bezos-backed AI start-up, perhaps adding to the enthusiasm.

The strong results, which came on a generally very good month for AI tech companies, propelled Nebius to new heights.

Nebius is becoming a household name in AI

While Nebius' revenue is still quite small, it is just deploying all the cash it received from its divestments into new AI data centers adorned with Nebius' proprietary infrastructure servers. In his letter to shareholders, CEO Arkady Volozh noted that in the span of just three quarters, the company has expanded from one data center in Finland to now five across Europe, the U.S., and the Middle East.

In the first quarter, Nebius grew revenue by 385% to $55.3 million, while adjusted (non-GAAP) net losses per share deepened by only 19%. Meanwhile, the company's annualized recurring revenue (ARR) grew at an even higher rate than revenue, up a whopping 684% to $249 million.

Investors were also able to get a good sense of the company's future profit potential. While revenue grew 385%, Nebius' total gross, depreciation, and operating costs combined grew by only 96%.

Given the strong results, on top of a strong recovery in AI tech stocks following the May 12 U.S.-China rollback of tariffs, it's no wonder Nebius had a strong month.

In addition, on May 9, Nebius made a strategic majority investment in Toloka, an AI data solutions start-up backed by both Bezos Expeditions and Mikhail Parakhin, CTO of Shopify (NASDAQ: SHOP). Toloka is a best-in-class expert data provider, drawing from experts in over 50 fields, and is a generator of synthetic data. The company already counts top AI clouds as clients, which use Toloka's data to power their large language models.

Image source: Getty Images.

Nebius continues its ascent in June

Not only did Nebius have a fine May, but it also skyrocketed another 29.4% in June, after London-based Arete Research analyst Andrew Beale initiated coverage on the stock with a whopping $84 price target -- more than double the stock's price at the time.

Like peer CoreWeave, it appears Nebius is also at the front of the line when receiving Nvidia reference design systems. That should pave the way for continued strong growth.

Still, with an $11.4 billion market cap, or 45 times its current ARR, Nebius' recent skyrocketing stock price appears to reflect a lot of this hypergrowth already. That being said, Arete Research's analyst apparently thinks its growth trajectory justifies that sky-high valuation -- and then some.